Stocks marched higher as bond yields leveled off and the $1.9 trillion stimulus bill moved through the legislative process. A muted inflation number and a better-than-expected jobless claims report evidenced an improving economy absent an attendant rise in inflation.
The technology sector was particularly volatile, with the Nasdaq Composite falling into correction territory to start the week as investors rotated into cyclical opportunities.
Technology rebounded strongly as bond yields stabilized and bargain hunters purchased tech names at reduced prices. The bounceback propelled the S&P 500 to a record high, while the reopening trade drove the Dow Industrials above 32,000 for the first time.
The week ended on a mixed note, with the Dow and S&P 500 adding to their record closes and the Nasdaq Composite trimming its weekly gain.
Treasury auctions to finance federal spending are usually staid affairs, but investor trepidation was high ahead of last week’s auctions of 10-year and 30-year Treasuries. Investors were concerned that lukewarm demand amid a huge supply had the potential to drive yields higher and take the pressure on stock prices lower.
As it turned out, Wednesday’s auction of 10-year Notes was received with adequate demand, helped by a tame February inflation number and strong overseas interest. The following day’s 30-year auction also went relatively smoothly, though the auction yield was 36.2 basis points higher than last month’s auction. Despite $120 billion of federal debt issuance last week, yields steadied, easing investors’ interest rate concerns for the moment.
This Week: Key Economic Data
Tuesday: Retail Sales. Industrial Production.
Wednesday: Housing Starts. Federal Open Market Committee (FOMC) Meeting Announcement.
Thursday: Jobless Claims. Index of Leading Economic Indicators.
Source: Econoday, March 12, 2021
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Coupa Software (COUP).
Wednesday: Five Below (FIVE), Cintas Corporation (CTAS).
Thursday: FedEx Corporation (FDX), Nike, Inc. (NKE), Dollar General (DG).
Source: Zacks, March 12, 2021
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
The Wall Street Journal, March 12, 2021
Bloomberg.com, March 10, 2021
CNBC, March 11, 2021
The Wall Street Journal, March 10, 2021
The Street, March 11, 2021